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European stocks open higher amid hopes of vaccine-led recovery

Labour leader Sir Keir Starmer receives his first dose of the Astra Zeneca coronavirus vaccine from midwife, Emily Malden at the Francis Crick Institute in his Holborn and St Pancras constituency. Picture date: Sunday March 14, 2021. (Photo by Stefan Rousseau/PA Images via Getty Images)
Labour leader Sir Keir Starmer receives his first dose of the Astra Zeneca coronavirus vaccine. European stocks open higher amid hopes of vaccine-led recovery. Photo: Stefan Rousseau/PA Images via Getty Images) 

Europe opened with a positive start on Monday. Britain’s FTSE 100 (^FTSE) rose 0.36% after the bell, while France’s CAC (^FCHI) jumped 0.57% and Germany’s DAX (^GDAXI) was 0.26% up. 

Traders remain optimistic for a rapid economic recovery thanks to the rollout of the COVID-19 vaccine. Also on Friday, data published by the Office for National Statistics (ONS) showed UK GDP shrank by 2.9% in January, lower than expected. 

Economists had forecast a month-on-month decline of 4.9%.The slump was also much smaller than the fall in GDP seen during the first lockdown last year. 

Richard Hunter, head of markets at Interactive Investor, said: “Investors continue to anticipate speedy economic recoveries as the powerful forces of accelerating vaccine rollouts and significant financial assistance combine.” 

READ MORE: Pound under pressure after UK GDP and trade data 

Across the pond, S&P 500 futures (ES=F) were up 0.13%, Dow futures (YM=F) rose 0.3%, and Nasdaq futures (NQ=F) were 0.06% higher as trade began in Europe. 

Last week, the Dow, S&P 500 and Russell 2000 hit record highs, with the gains found in sectors left behind by the huge tech rally that has helped support most of the move higher in US equities over the last few years. 

US bond yields hovered near a 13-month peak on Monday as investors bet US economic growth will accelerate after the $1.9tn (£1.36tn) stimulus bill President Joe Biden signed last week. 

Michael Hewson of CMC Markets said: “Rising bond yields, with the US 10-year yield now above 1.62%, and at a one year high, have served to cast doubt about the longer-term sustainability of some of the more expensive areas of the US market, and through we did see the Nasdaq break a run of three successive weeks of losses, the continued rise in US long term yields is prompting some anxiety about sky high valuations across a number of areas.” 

Overnight in Asia, Japan’s Nikkei (^N225) ticked up 0.17% while shares elsewhere were mixed. The Hang Seng (^HSI) edged 0.16% higher and the Shanghai Composite (000001.SS) dipped 0.96%. 

It came as data showed that factory production and consumer spending in China both surged at the start of this year. 

Industrial production in the world’s second largest economy climbed 35.1% year-on-year in the first two months of 2021 – the biggest bounce recorded in decades. Meanwhile, retail sales grew 33.8% in the period, compared to a year ago. 

Urban unemployment in China rose to 5.5% in February, from 5.2% in December, while fixed asset investment growth came in below forecasts – jumping 35% year-on-year, versus forecasts of a 40% jump.

 

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